CCAP Overview

Market Overview: Business development companies (BDCs) are currently facing a downturn due to concerns over economic slowdown, despite small businesses thriving and profits increasing, particularly aided by AI advancements.

BDC Portfolio Highlights: A seven-stock BDC portfolio yielding 13.5% is highlighted, with specific companies like Sixth Street Specialty Lending and Gladstone Investment noted for their strong performance and unique strategies in navigating the current interest-rate environment.

Challenges and Opportunities: While some BDCs like FS KKR Capital and Goldman Sachs BDC have faced dividend cuts and high non-accruals, others like BlackRock TCP Capital are struggling with losses but still offer high yields, indicating a mixed landscape for investors.

Investment Recommendation: The article suggests considering a specific fund with an 11% dividend yield that promises both income and potential stock-like gains, positioning it as a compelling investment opportunity amidst the current BDC challenges.

Analyst Recommendation: Keefe, Bruyette & Woods has maintained an "Outperform" rating for Crescent Capital BDC (NasdaqGM:CCAP) as of November 14, 2025, with a projected one-year price target of $17.34/share, indicating a potential upside of 26.89% from its current price of $13.66/share.

Fund Sentiment: There are currently 108 funds reporting positions in Crescent Capital BDC, reflecting a 4.85% increase in ownership over the last quarter, with total institutional shares rising by 6.70% to 25,065K shares.

Shareholder Activity: Major shareholders such as Texas County & District Retirement System, Blackstone Group, and Fidelity National Financial have maintained their positions without changes, while Franklin Resources increased its holdings by 6.57% despite a significant decrease in portfolio allocation.

Market Outlook: The put/call ratio for CCAP stands at 0.36, suggesting a bullish sentiment among investors, alongside a projected annual revenue increase of 24.92% to $216 million and a non-GAAP EPS forecast of 1.89.

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Management Overview: Crescent Capital BDC reported a net investment income of $0.46 per share for Q3 2025, maintaining a 110% coverage of its base dividend, while net asset value decreased to $19.28 per share due to losses from tariff-impacted portfolio companies.

Financial Performance: The investment portfolio remained stable at $1.6 billion, with a debt-to-equity ratio of 1.23x. The weighted average interest rate on borrowings decreased to 5.99%, and the percentage of nonaccrual investments improved to 1.6%.

Outlook and Risks: Management anticipates that a lower base rate environment may pressure portfolio yields and net investment income, but they highlighted several mitigating factors, including spillover income of $1.10 per share and a strong origination pipeline.

Analyst Sentiment: Analysts expressed cautious concerns regarding dividend sustainability and tariff impacts, while management maintained a confident tone, emphasizing proactive risk management and the resilience of their portfolio amidst market challenges.